Major players in the delivery realm have teased drone delivery for years. It’s time to see if this high-flying idea has wings (or if it’s just full of hot air).
Drones have gone from toys for hobbyists to weapons of war – yet their business uses have so far been limited to acting as camera mounts and performing light shows. Now drones are finally being integrated into the supply chain.
What are drones?
Also known as Unmanned Aerial Vehicles (UAVs), drones are autonomous flying machines. Whether remote-controlled or pre-programmed, the class of drones being referred to in discussions of delivery are typically powered by rechargeable lithium-ion batteries and move with the use of 4-8 propellers, such as Aria Insights’ (formerly CyPhy Works) PARC™ drone. Others, like German parcel carrier DHL’s Parcelcopter, use a tilt-wing design.
What kind of deliveries?
Amazon, DHL, and even Domino’s Pizza are all eyeing last-mile delivery as the niche for drones to fill. It’s no wonder: according to research from Deutsche Bank, drone delivery would cost a mere $0.05 per mile, compared to $2 per mile with USPS, or $6.50 per mile with a premium carrier. Drone deliveries would also only take roughly 30 minutes, as opposed to the current two hours allotted for Amazon Prime Now. Another benefit? They're environmentally-friendly, drastically cutting carbon emissions.
This poses an enormous disruption to the current last-mile logistics model. Twenty different partners share duties in shipping Amazon’s six-hundred million annual packages alone, with FedEx, USPS, and UPS moving the most. Cutting out the middle-man might save consumers and shippers as much as 53% of the delivery cost, but it also means thousands of lost jobs and millions in lost revenue for last-mile carriers. That’s why UPS plans to stay competitive by developing drones of their own, which will integrate into their existing vehicle fleet.
What about other logistics?
Much of the logistics infrastructure up to the last-mile wouldn’t change. While it’s true that the largest UAV can carry 1.5 tons, that’s less than half the capacity of a class 2b truck. As such, drones aren’t in a position to disrupt the current supply chain model which relies on ships, trains, and trucks for long-haul and medium transport. One possibility for expansion is in drone mapping and navigation. Using autonomous drones which can navigate without the need for an operator greatly increases efficiency and versatility.
What’s the hold up?
Several small-scale tests have been run, including a three-month trial by DHL that included 130 deliveries. However, that’s a far cry from the aforementioned 600 million Amazon shipments.
One concern is the actual delivery location. Previous tests conducted by Amazon, UPS, and Domino’s Pizza all delivered to a wide, empty lawn. That model faces challenges in dense urban areas where people have either small yards or live in multi-family residential buildings. DHL attempts to solve this dilemma with fully-automated Parcelcopter Skyports derived from their Packstations, where people can send and retrieve packages in a designated area. Existing Skyports are small, however, with restricted package and drone capacity.
Because of the limited testing, there are still several unknowns: how easy is it to shoot down a drone? How easy is it to take control of one? How safe are they after hundreds of hours of air time? Why happens if the battery dies mid-flight?
Not surprisingly, the general American public is lukewarm about drone delivery: a USPS survey found more people are for it than against it, while most hadn’t yet made up their minds. A chief concern was malfunction, which happens to be a concern for the FAA as well.
Current FAA regulations prohibit operating drones outside of the operator’s line-of-sight or from within a moving vehicle. They post a combined UAV + package weight limit of fifty-five pounds. The regulations forbid flying drones over any person who is out of doors and not involved in the operation of the drone, or over moving vehicles. The weight limit is less of an issue as close to 86% of Amazon’s last-mile deliveries are under five pounds. The rest severely limit the practicality of drone delivery.
While other countries such as the UK have less stringent requirements, they’re still prohibitive for large-scale testing. Thus drone delivery currently resides in the same realm as flying cars – the technology exists, but it remains to be seen as to whether it's practical to implement in the near future...